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A Study of the Role of Life Cycle Stages in the Relationship between Related Party Transactions and Performance in TSE’s Listed Companies
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| Hossein Etemadi, Masoume Sahirad |
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Abstract: (1357 Views) |
| The purpose of this study is to determine the role of lifecycle stages in the relationship between Related Party Transactions and performance. There are conflicting views on the relationship between Related Party Transactions and performance. This paper shows that the lifecycle stages can explain the conflicting views. Three hypotheses were developed and examined. Following Anthony and Ramesh (1992), the sample firms were classified into three stages of lifecycle. Using Fixed Effect Panel Data Regression method, our results of 80 firms during 2006 through 2009 showed that in Growth stage, there is a positive relationship between Related Party Transactions and performance. It means that in this stage the Efficient Transaction view is dominant. However in the Maturity stage, we found negative relationship between Related Party Transactions and performance. This finding suggests that in Maturity stage, the Conflict of Interests view is dominant. Finally we Document that in the Wane stage, the relationship between Related Party Transactions and performance is not predictable and depends on motivations and purposes of related parties. |
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| Keywords: Related Party Transactions, Firm Lifecycle, Efficeint transactions, Conflict of Interests |
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Full-Text [PDF 2494 kb]
(51 Downloads)
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Type of Study: Research |
Subject:
General
Received: 2011/11/5 | Accepted: 2011/12/16 | Published: 2011/12/22
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